All it takes to find the next area that’s set to boom is a bit of elbow grease and these six essential tips:

1.Be open to searching interstate

Chances are that the most appropriate suburb to invest for finding growth potential is not within a 10km radius of your home. In fact, looking outside your local area and buying sight unseen can actually be an advantage, because it forces you to look more at the growth drivers and statistics as opposed to trivial and emotional things, like whether or not you like the look of a bathroom. If you are still nervous about venturing into the unknown, the services of a buyer’s agent might be your best bet.

2.Look for the visible warning signs

Look closely and you might realise that a working-class suburb is starting to show signs of accommodating for a wealthier demographic. Cate Bakos of Cate Bakos Property reveals some of the tell-tale signs that gentrification is underway and property prices should adjust in a positive manner accordingly:

  • New cafes are starting up in the high street
  • Low density development activity – such as developers purchasing house blocks and building 2-3 townhouses on a site
  • Renovation projects underway on old houses
  • Introduction of ‘disposable income’ shops
  • ‘Phasing out’ of lower-rent service provider shops  (such as local accounting firms, dry cleaners, etc.) to make way for galleries, boutiques, cafes and bars
  • Increased numbers of prep children in an annual intake.
3.Study supply and demand

It’s very important to look for a low vacancy rate so you are more likely to find a tenant for the property. In addition to reading Your Investment Property, speaking to multiple local real estate agents for up-to-the-minute vacancy rates is a wise move.  Other stats which indicate supply and demand include the typical number of days a property is on the market for before it is sold, the amount stock on market, the auction clearance rates, the renter-to-home-owner ratio and the internet search scores.  

4.Research future infrastructure growth

New or improved roads, rail or bus links are all examples of transport infrastructure which can add tremendous value to a suburb. Moreover, if a government is planning this kind of development it is a good sign that they are anticipating a strong population increase in the area, which is a giveaway that property prices will rise too.

It is also an indication that medical and education facilities, shopping precincts and employment hubs will also have to grow accordingly.

“All of the proposed future spends are available online, through the appropriate council websites,” says Muirhead.

It’s also a good idea to keep a watch out for planning alerts, local community news, streetscape changes and new development starts, says Bakos.

And aside from upgrades and additions, it’s important to consider intangible drivers which add value, such as scenic views of water, trees or a city. 

5.Consider the demographic

If the population’s median age is decreasing, while the population itself and the average household income is increasing, this is a solid indication that growth is on the way. For the most recent reliable stats, check out

Another giveaway that the numbers of young professionals are on the up is if the local bars, cafes and restaurants are becoming more upmarket.

6.Monitor median prices and growth rates

This is where the ripple effect comes in. The best way to go about finding one is to first identify expensive suburbs that have recently experienced a surge in growth in the last 12 months. This is often happening within 10km from the CBD or towards the coastline and could be occurring due new transport infrastructure or perhaps the emergence of a new café culture.

The next step is to find the cheaper immediate neighbours which have not had their growth spurt yet. Also monitor the next group of neighbours because the ripple can often go further than the adjoining suburbs.

Then compare the growth and price of the premium suburb with its neighbours. Put simply, the greater the difference, the greater the potential. Generally a good rule is that if there’s more than a 10% difference in prices than the cheaper suburb should have some ground to gain.

Just keep in mind that the neighbours with the most similarities to the source of growth are the ones most likely to get a higher share of the ripple. Also, check that whatever it is that’s fuelling the price rise would also suit the demographic of the cheaper suburb.

Therefore, identifying the chief growth driver(s) is crucial to your success in riding the ripple effect.